Transcript: Brian Deese on "Face the Nation," June 19, 2022

The following is a transcript of an interview with Brian Deese, director of the White House's National Economic Council, that aired Sunday, June 19, 2022, on "Face the Nation."

MARGARET BRENNAN: Welcome back to Face the Nation. We're joined now by Brian Deese, he is the director of President Biden's National Economic Council. Good morning and welcome to the broadcast.

DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL BRIAN DEESE: Thanks for having me.

MARGARET BRENNAN:  You have an incredible challenge on your hands. Yes, the jobless rate is low. But wage growth, not keeping pace with inflation. What do you say to Americans who are thinking that they might need a second job to pay their bills? 

DEESE: Well, it is an uncertain moment and we face real challenges, global challenges. Inflation is a global challenge 9% in the UK over 8% in Europe, but we also have real strengths here at home. And so what I would say is, we need to navigate through this transition in a way that gets us to stable growth without giving up all of the incredible economic gains that we've made. You mentioned the jobless rate at 3.6%. We've also seen household balance sheets strengthened over the course of this period. A study came out this past week that showed that the typical family has $10,000 in additional savings. Because of those strengths. We've seen things like mortgage delinquencies, the lowest in 15 years, credit card delinquencies the lowest in 30 years. So we have real strengths in this economy. What we need to do now is do what the President has said, put our top priority on bringing prices down and do so in a way where we don't have to give up all of those economic gains. 

MARGARET BRENNAN: But yes, there are people sitting on cash, that's actually part of the problem, right part of the challenge, but for those folks who are struggling to pay their bills can you level with them because the Congressional Budget Office predicts that high inflation will persist until 2024. The Treasury Secretary has said it will stay higher than the originally forecast. 4.7%. When does it come down? How much time are you talking about? 

DEESE: Well, prices are unacceptably high right now. And that's why the President has said we need to make this our top economic focus and do everything that we can to get them down. Most independent forecasters, the blue chip, the Federal Reserve, as you said, see inflation beginning to moderate over the course of this year. But, our focus is on what are the steps, what are the policies that we can take and the single most impactful thing that we could do right now is to work with Congress to pass legislation that would lower the costs of things that families are facing right now–

MARGARET BRENNAN: –Like what now?

DEESE: –like prescription drugs, we could lower the cost of prescription drugs by allowing Medicare to negotiate better prices that would actually lower federal spending, and it would lower the cost that people pay. 

MARGARET BRENNAN: The President said this week in a rare interview that he actually has the votes to do it. Where's the deal? When's the vote? 

DEESE: Well, lowering prescription drug costs is one piece. Lowering utility costs by providing tax incentives for energy is another piece, but equally important, lowering the federal deficit by enacting long overdue tax reform. If we can do a package like that we can move forward in the near future. It will not only help in lowering prices, but it will send a signal to the markets and the global economy that the United States is really deadly serious about taking on this inflation–

MARGARET BRENNAN:  –hiking taxes isn't going to change the price of milk. When and how are you actually putting forward this package? 

DEESE: The package has been debated it's been worked through–

MARGARET BRENNAN: –It's failed back when Build Back Better's version of it. So if inflation is the number one priority right now, when are you scheduling a vote to do the things you just laid out? 

DEESE: We're working very closely with congressional leadership with Senate leadership on that. Senator Schumer is working with his caucus to try to get a final package in place and we're hopeful that we'll see progress on that in the coming weeks. 

MARGARET BRENNAN: So in the coming weeks, you think you can get this done on a party line vote before September? 

DEESE: We're hopeful that we can move- we can move forward on that. We're hopeful we can move forward on that and other priorities in Congress as well. There's a bill on semiconductors which I know you've talked about on this program, computer chips. The lack of affordable and available computer chips has driven up prices across the economy, including things like automobiles. There's a bill in the Senate and the House, bipartisan bill that we could get done. We're hopeful that we can move that as well before the August recess, that would provide some real relief to the economy as well.

MARGARET BRENNAN: And you need that before the midterms. This has a huge political cost to it. 

DEESE: Well, our focus and my focus is on the economic impact that we totally understand and when people are pulling up to the gas pump today prices are too high. That's why we've made this the priority that we have, and even as Congress is acting it's why that we are acting on our own. The President has taken just over the last month steps to lower the cost of housing, lower the cost of internet, lower the cost of energy for American families. And we're gonna keep doing that even as we work with Congress on their priority. 

MARGARET BRENNAN: Despite all of what you laid out, and I know the President said, recession is not inevitable. It seems increasingly probable that the Conference Board put out their survey this week, it shows eight out of 10 global CEOs now expect a recession within the next 12 to 18 months. So what powers does the President have to stop that kind of contraction?

DEESE: Well, I think what- where we are in the economy right now is in a transition and I spoke to CEOs this- over the course of the past week from sectors across the economy, and they're figuring out how to navigate this transition. Some of this is exactly what we need to see–

MARGARET BRENNAN: –they're planning around a recession. 

DEESE: Well, they're planning around transitions in our economy, people are buying less goods, spending time at home, they're spending more on services that creates some real challenges for some companies and some CEOs. It creates opportunities for others. So they're planning around this transition. What I would say is that not only is the recession not inevitable, but I think that a lot of people are underestimating those strengths and the resilience of the American economy. We have been through delta and omicron. We've had a war in Europe and all of the impacts that that has had and through it, the American economy has remained resilient. What we want to focus on now is taking every step we can to continue that progress. Of course, there are risks. Of course there are challenges, but there are also things that we can do right now on our own working with Congress, that's why we're putting such a priority on this. 

MARGARET BRENNAN: But shouldn't you level with the American public and just say we are in uncharted waters. I mean, even the Federal Reserve Chair said this week there are things beyond his control. He can't control the price of gasoline, he can't control the war in Europe. He can't control COVID. He has a limited set of tools and so do you. Is the President powerless here? 

DEESE: Absolutely not. Look, we face unprecedented global circumstances, a global pandemic and a war in Europe, that is affecting the global economy but at the same time, we have a strategy that will make a difference. That legislation that we were talking about lowering the cost of prescription drugs lowering the cost of energy, lowering the federal deficit, that would make a real difference. 

MARGARET BRENNAN: and you have all 50 Democrats on board for that? Because you didn't last time you tried parts of this bill.

DEESE: look, nothing is- nothing is done until it's done. We're hopeful. We're working hard. We got our head down and we're going to try to get something done. 

MARGARET BRENNAN: So a number of economists I want to put up a chart of inflation here for our audience to see, measured by the Consumer Price Index. So from the beginning of the pandemic through now, as you can see, the tick up began a good year before the war in Ukraine began. A number of economists including at the San Francisco Fed have said that the tremendous fiscal spending that went underway, the 6 trillion in two years did add to that, including, as you can see, right on there, the 2 trillion that the Biden administration pushed through in the spring of 2021. So when people look at that, and they say, well, the White House told us why that inflation would be transitory. The White House told us we could go through with this kind of spending, we'd be fine. Even when Democrats within your own party were warning this would add to inflation. How do you win credibility here to the public and say, this time we're not wrong?

DEESE: Well, you just have to look around the world today to recognize that the two principal drivers of inflation are the pandemic and Putin. We're seeing this everywhere. It is a global phenomenon, as I mentioned in the UK, inflation's hit 9%.

MARGARET BRENNAN:  –right, but the point is those are the things you can't control.

DEESE: – In Europe it's over –

MARGARET BRENNAN: –I'm talking about the things you can.

DEESE: Absolutely.

MARGARET BRENNAN: So, how do you win that credibility back? 

DEESE: Well, if we look at the things that we can control, we win credibility. By taking action. This President is acting. This president galvanized the global community to do a historic release of oil from the Strategic Petroleum Reserve a million barrels a day. Leading oil market analysts this week said that action was single handedly responsible for keeping oil prices from going up even further–

MARGARET BRENNAN: –Right, short term.

DEESE: –we are going to take action. We're going to prioritize, we're going to make clear that tackling inflation is our top economic priority. And we're going to encourage Congress to take action as well. The way we build credibility is by demonstrating results. 

MARGARET BRENNAN: One of the things that you do have control over at the executive is the approach on tariffs. Treasury Secretary Yellen told me back in November, she acknowledged that the Trump era China tariffs do add to inflation domestically here. President was asked about this yesterday and said, we are still in the process of making up my mind. If inflation is the number one priority. Why are you dragging out this decision? 

DEESE: Well, I'll let the President's words speak for himself. We're looking closely at and I anticipate the president will have more to say on that issue in the coming weeks. But just to be very clear over the course of the last couple of months. This is an issue about our supply chains and about getting goods to the United States in a way that is effective and cheap. And the President has been incredibly focused on that-MARGARET BRENNAN: –Do you- do you favor it?  

DEESE: –Just this past week- just this past week- just I'm gonna let- I'm gonna let that process unfold them and let the President speak to his decision on that front for just this–

MARGARET BRENNAN: How much do you think it adds to inflation? 

DEESE: Well, I just want to be clear, this is about a broader issue. This is about are we getting the goods and services that we need in the United States in a way that is good for our economy, good for American jobs, and also lowers prices. There are a lot of ways at that target. Just this past week, the President signed into law a bipartisan piece of legislation to crack down on shipping fees. Shipping fees add to the cost of goods that come to the United States over their 1,000% price increases that we've seen. I've talked to CEOs just this past week, who said they had to pass those costs directly on to consumers by signing that bill into law. We're gonna help to reduce those prices, paid. And that means reducing prices on the shelves for consumers. So there's a lot of ways to- to at this and we're trying to focus on all of them. 

MARGARET BRENNAN: Well, we'll continue to track it. Thank you very much, Brian Deese, for coming in. 

DEESE: Thank you.

MARGARET BRENNAN: And we'll be right back.